Public sector pay strategy 2023 to 2024

Section 4: Key Features of the 2023-24 Pay Strategy

Pay metrics must balance flexibility with fairness and affordability, which may mean taking decisions on the size and shape of the workforce.

The key features of the 2023-24 Public Sector Pay Strategy are:

• the implementation of the real Living Wage rate of £10.90 per hour, including it being applied for internships and Modern Apprentices;
• a suggested cash underpin of £1,500 for public sector workers who earn £25,000 or less;
• Pay uplift for Chief Executives is capped at the same cash amount as the lowest paid;
• setting a pay award floor of 2%; and
• recommending a central metric of 3.5% and setting both an award ceiling and pay envelope maximum of 5% on business efficiencies and/or pay bill savings.

In addition, the 2023-24 Public Sector Pay Strategy:

• continues our commitment to No Compulsory Redundancy.
• strongly encourages employers to work towards standardising to a 35-hour working week;
• introduces the requirement for employers to implement a Right to Disconnect;
• commits to delivering a 4 Day Working Week public sector pilot;
• retains discretion for individual employers to reach their own decisions about pay progression (limited to a maximum of 1.5% for Chief Executives), which continues to be outwith the pay strategy limits but should be considered when considering affordability;
• maintains the suspension of non-consolidated performance related pay (bonuses);
• continues the expectation to deliver a 10% reduction in the remuneration packages for all new Chief Executive appointments; and
• commits to a review of the Chief Executive framework.

Progression

Nothing in this Pay Strategy is intended to interfere with pay progression arrangements for staff in the pay remit, or to constrain discussions between employers and staff and/or their representatives on this issue. Decisions taken on pay progression should be based on business needs, considering headcount and affordability.

Wellbeing

The Scottish Government is committed to promoting wellbeing in the workplace and a healthy work-life balance. This Pay Strategy strongly encourages employers to work towards standardising to a 35-hour working week, with the expectation any reduction in the working week should not impact negatively on productivity and be delivered through normal negotiations as part of a progressive and agreed package of measures, including terms and conditions that support new ways of working.

This Pay Strategy expects all employers to have implemented a Right to Disconnect for all staff, discouraging an “always on” culture. More background information about the Right to Disconnect will be included in the Technical Guide.

No Compulsory Redundancy

Since 2007 a key strand of the Scottish Government’s approach to pay is the commitment to No Compulsory Redundancy (NCR). The commitment has continued in recent years and was originally intended to off-set the impact of significant pay restraint during the years of UK Government austerity and promote job security.

An unintended consequence of this commitment is that employers can find it difficult to reshape their organisations in line with delivery priorities, and some continue to employ people they no longer need. This situation can result in employees being locked into jobs that are unsatisfying and potentially no longer required.

Public sector leaders and trade unions may need to engage on matters relating to the reduction of reprofiling of the workforce as part of pay negotiations. While the strategic position remains that public bodies should work with their staff representatives to negotiate extensions to their no compulsory redundancy agreements for 2023-24, proposals to change (extend or reverse) the NCR through the application of the Severance Policy for Scotland, will be considered on a case-by-case basis.

Where public bodies are seeking to re-structure, particularly as part of a multi-year reform option, full consideration must be given to redeployment and retraining.